John Swinney broke his promise to produce a Scottish Budget focused on
economic growth by prioritising the health service instead, the official
adviser to Holyrood’s finance committee has suggested.

Professor David Bell, a senior economist from the University of Stirling, concluded “it is difficult to avoid the conclusion” that the NHS is the Finance Minister’s main spending priority for 2013/14.

While the health budget will increase by £290 million next year and ‘free’ universal benefits are protected, the academic said that spending on capital building projects to help the construction industry will fall by £140 million.

Prof Bell’s report to the committee also warned the Finance Minister only funding a fraction of the cost of the council tax freeze, which is expected to grow to £300 million a year by 2016/17.

His intervention came the day after Johann Lamont, the Scottish Labour leader, warned Scotland can no longer afford the gamut of such universal ‘free’ benefits without increasing taxes.

It also followed widespread criticism last week’s Budget, which barely deviated from spending plans set out a year ago before Scotland entered a double-dip recession and growth forecasts were slashed

In a sign of the pressure on the minister, he yesterday sent a letter that he asked be distributed to Holyrood’s committees outlining supposed inaccuracies in the attacks.

However, many of his claims appeared to be disputed by Prof Bell, who also questioned how the minister’s decision to impose an extra £163 million of business taxes was “consistent with the objective of maximising economic growth”.

“Given the relative changes in other budgets, it is difficult to avoid the conclusion that maintaining current spending on health is currently the main priority of the Scottish Government,” he concluded.

Gavin Brown, Scottish Tory finance spokesman, said the report was the latest evidence Mr Swinney has broken his pre-Budget promise that “every penny” would be used to “boost the pace of economic recovery”.

“The Scottish Government promised much but delivered little. Once again it seems this is a cabinet secretary who has a genius for putting flamboyant labels on empty luggage,” he said.

Prof Bell’s report said Mr Swinney’s spending money will increase slightly to £28.5 billion next year, although this still represents a cut when inflation is included.

He said the Finance Minister is handing councils £70 million a year to maintain the council tax freeze but estimated £300 million “compensation” will be needed by 2016 to fully fund the pledge.

The share of the Scottish Budget allocated to local authorities is on course to fall from 36 per cent to 29 per cent by 2015 as part of a “long-run decline”.

A one per cent pay increase for public sector workers will likely cost taxpayers around £150 million, he said, but cuts in college funding will mean further job losses in the sector over the next two years.

In his letter, Mr Swinney said the Scottish Budget is falling in cash terms and claimed councils will enjoy a greater share of the spending money “on a like-for-like basis” than when the SNP came to power in 2007.